Bailout

Attacking unemployment

Posted on July 09, 2010
Unemployment is tragically, stubbornly, high -- and that's going to prove devastating not only for the millions of long-term unemployed but also for the USA as a whole, if it continues indefinitely. And it's not just the Americans without jobs who need a way out: it's the ones in bad, underpaid service-industry jobs as well.

Why is Nick Denton suddenly so bullish?

Posted on July 09, 2010
At the very end of his profile of Henry Blodget, Andrew Goldman drops in a jaw-dropping quote from Gawker founder Nick Denton:

Money supply chart of the day

Posted on July 09, 2010
If Matt Yglesias can wonk out with meditations on the velocity of money, then I can wonk out with a chart:

The dynamics of sovereign debt

Posted on July 09, 2010
Edward Chancellor's masterful 10-page essay on sovereign debt crises past and present should be required reading for anybody seriously interested in the "new normal" and the way that sovereign debt dynamics might play out over the medium-to-long term...

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The myth that risk goes away over time

Posted on July 09, 2010
Rodney Sullivan has a great column which is nominally about "risk parity" strategies, but which in fact applies much more broadly -- to anybody, in fact, who buys in to the idea that if you invest in riskier assets, you'll end up with higher returns.

Counterparties

Posted on July 08, 2010
Tal Yarkoni on Dunning-Kruger; he goes on to debate Dunning in the comments -- Yarkoni

Why do we invest in cap-weighted indices?

Posted on July 08, 2010
Felix Goltz and Véronique Le Sourd have an interesting paper (PDF) revisiting the question of why so many of us invest in capitalization-weighted stock indices. It turns out that the theory behind our behavior is pretty weak: first of all, you have to believe in the capital asset pricing model, or CAPM...

Lafite datapoint of the day

Posted on July 08, 2010
Andy Xie on the market for fine wine in China:

Institutions exit the muni market

Posted on July 08, 2010
Jenn Ablan takes a look at the muni market today, and although inflows have been strong this year, the smart money seems to be moving out of the market, positioning itself for a gruesome second half of the year.

Are basketball economics broken?

Posted on July 08, 2010
Amy Shipley has an odd piece today on the economics of signing basketball stars. I know absolutely nothing about basketball, but I do know that Shipley's story doesn't convince me that the NBA is suffering the "economic woes" of her headline because "a broken economic system" has resulted in teams spending too much money on players.

Zirp and the double dip

Posted on July 08, 2010
Greg Ip has an interesting argument: if we were really headed for recession, he says, the yield curve would be inverted. But you can't have an inverted yield curve when the Fed sets short rates at zero. Therefore, we won't have a double dip.

Counterparties

Posted on July 07, 2010
The Time Mag paywall: it's back, and higher than ever -- Nieman Lab

Why munis don?t pose a systemic risk

Posted on July 07, 2010
David Goldman has reacted with a curious mixture of alarm and reassurance to Dakin Campbell's story about US bank holdings of municipal debt:

Time?s weird web strategy

Posted on July 07, 2010
Josh Tyrangiel became arguably the most sought-after editor of his generation by boosting Time.com's pageviews from 400 million to 1.8 billion within three years, and by successfully transforming a bunch of grizzled old magazine journalists into web-speed multimedia content producers:

Can America improve its bad jobs?

Posted on July 07, 2010
The problem of falling wages for people without a high-school diploma is well presented by Richard Florida, in an op-ed headlined "America needs to make its bad jobs better":

Income inequality chart of the day

Posted on July 07, 2010
Catherine Rampell features this chart today, showing how wage inequality has increased over the past 30 years, especially for men. But in fact what we're seeing here understates how bad things have been for most men over the past generation. If you go to the source, this chart only shows data for people working full time...

The ethics of owning BP stock

Posted on July 06, 2010
Value investor Whitney Tilson is long BP, and answered my ethics question in a Q&A sent to his investors:

Counterparties

Posted on July 06, 2010
How Citi "structured their business so that no agency knew what they needed to effectively regulate the company" -- American Banker

The more you know, the better it tastes

Posted on July 06, 2010
Patrick LaForge was underwhelmed by his visit to McNulty's Tea & Coffee:

Why admire RenTech?

Posted on July 06, 2010
Memo to John Ioannidis: you're popular with some extremely rich and important people! Sebastian Mallaby reports on RenTech:

Entering the age of default

Posted on July 06, 2010
It's worth bearing this list in mind in light of what David Merkel has to say about sub-sovereign debt: I have long said that the health of the states is a more valid measure of the health of the nation than looking at national statistics. ...I don't think it's fair to say that problems with Greek hospital debt mean that the sovereign has already defaulted, any more than non-payment from Illinois means that we're in the middle of a US default.

Sovereign default datapoints of the day

Posted on July 06, 2010
CMA Datavision has released its sovereign risk report for the second quarter of 2010. It's based on CDS prices, and it makes for fascinating reading. It was a bad quarter for sovereign credit: 93% of sovereigns widened, and they widened a lot -- by 30%, on average...

Towards a Google Bank

Posted on July 06, 2010
Adam Ozimek has a bright idea:

Truth and lies in oil-skimming statistics

Posted on July 06, 2010
Kimberly Kindy has an excellent and very sobering report on the monstrous discrepancies between the various numbers being bandied around when it comes to the amount of oil that BP is able to skim off the Gulf of Mexico every day.

Employment falls

Posted on July 02, 2010
It's never good when employment falls during what's meant to be an economic recovery. It's worth remembering that if people start getting excited about today's drop of 125,000 in the total-employment number. That said, however, it is reasonably encouraging, in context: many more people than that were laid off from their temporary census jobs, to employment ex-census went up.

Counterparties

Posted on July 02, 2010
Best acquisition announcement ever -- YouTube

How blogging is like being bad at math

Posted on July 02, 2010
Just as I was headed down the pub to drown my sorrow at Ghana's gut-wrenching defeat in the World Cup, the shop steward of the International Brotherhood of Econobloggers instant messaged me to remind me that I still haven't written about Kartik Athreya...

Fixing information asymmetries

Posted on July 02, 2010
In the wake of my blog entry yesterday about the way in which Goldman's interaction with AIG helped to exacerbate the financial crisis, I got a very interesting email from a former Goldman employee:

Counterparties

Posted on July 01, 2010
David Merkel's analysis of Maiden Lane III -- Aleph

Communism and the financial crisis, cartoon edition

Posted on July 01, 2010
Remember David Harvey, the chap with the book-length critique of the financial crisis through an explicitly Marxist lens? I'd be surprised if the number of readers of this blog who read his book ever broke into the double digits, but hey, what if I told you that there's a fabulous little YouTube video from RSA Animate which illustrates a lecture that he gave with inventiveness and verve? That's more like it:

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